Auction Industry Growth Report: Dealers Loss

I just read in the Antiques and Arts Weekly newspaper that the National Auctioneers Association (NAA) reported that the art and antiques sector of the auction industry “experienced significant growth” of over 9% in 2006 over 2005. When was the last year dealers as a group reported any, let alone significant growth with year over year results?

This report comes at a time when dealers are being forced to liquidate inventory and are not able to aggressively participating in auction buying. In addition, it has been suggested that prices have fallen over the past several years in the middle market, where the bulk of the auction lots are sold. Dealers have become paralyzed by this present state and are withdrawing from any opportunity to fight to assert their once proud position and standing.

On the contrary, auctioneers are raising their commissions and income with impunity. With Sotheby’s and Christie’s recently raising their buyer’s premium from 12% to 20% on lots of values between $100,000.00 and $500,000.00 in tandem, Bonham’s just followed suit with not a comment from the trade. Do you have to wonder why they and other auctioneers have had success? Dealers are stuck cutting prices, not raising them while auctioneers raise them with the non-negotiable format of the buyer’s premium.

Unless I’m missing something here I can’t understand why dealers can’t see this handwriting on the wall; not only are the number of dealers shrinking in the field, but they offer no option for turning this situation around. With a strong US and world economy, the antiques trade should be booming, but the simple fact is that poor marketing and weak (or lack of any) trade leadership are to blame.

Perhaps only the strong will survive. But when I see what I consider strong dealers liquidating and repositioning to a weaker condition, this can only strengthen the auctioneer’s posture, and their ability to keep raising the buyer’s premium.